Foreign debt is a subset of the financial obligations that comprise a country's international investment position. It includes all the non-equity components of the net international investment position, that is, all recorded assets and liabilities other than equity securities and direct investment equity capital, including reinvested earnings.

The level of borrowing and other non-equity liabilities by Australian residents at a particular date can be equated with Australia's foreign debt liabilities. The level of Australian lending abroad and other non-equity assets at the same date are deducted from the level of borrowing to arrive at Australia's net foreign debt.

The level of net foreign debt at 30 June 2001 was $311.0b, up 14% on 30 June 2000. The increase during 2000-01 resulted from net financial transactions of $16.6b, price changes of $1.3b, exchange rate changes of $21.5b and other adjustments of -$0.5b (table 30.12).

At 30 June 2001, the net foreign debt of the public sector (general government plus public financial and non-financial corporations) was $8.5b, which accounted for 3% of total net foreign debt. Net foreign debt levels of private financial corporations and private non-financial corporations were $235.7b (76% of total net foreign debt) and $66.7b (21%) respectively (table 30.13).

30.13 LEVELS OF FOREIGN DEBT - At 30 June

1996

$m

1997

$m

1998

$m

1999

$m

2000

$m

2001

$m

Foreign debt assets(a)

-81,661

-94,218

-119,189

-127,038

-137,842

-169,642

Public sector

-31,100

-31,048

-41,329

-41,390

-46,424

-60,736

General government

-2,284

-2,836

-8,095

-9,378

-9,219

-10,338

Financial corporations

-28,144

-26,853

-32,196

-31,178

-36,811

-47,809

- Reserve Bank

-18,445

-22,164

-23,998

-22,883

-27,184

-36,958

- Central Borrowing Authorities

-11

-8

-179

-385

-1,090

-1,638

- Other financial corporations

-9,688

-4,681

-8,019

-7,910

-8,538

-9,213

Non-financial corporations

-672

-1,359

-1,037

-835

-393

-2,589

Private sector

-50,561

-63,170

-77,860

-85,647

-91,418

-108,906

- Financial corporations

-36,149

-45,619

-58,762

-63,445

-67,841

-80,216

- Non-financial corporations

-14,412

-17,552

-19,098

-22,203

-23,577

-28,690

Foreign debt liabilities(a)

275,533

302,846

346,971

352,615

409,913

480,594

Public sector

101,269

96,278

86,721

75,279

63,445

69,226

General government

39,697

42,549

38,463

32,373

22,872

24,100

Financial corporations

56,472

48,213

41,392

37,284

34,001

32,605

- Reserve Bank

51

72

48

40

34

49

- Central Borrowing Authorities

41,388

40,203

36,571

32,772

29,060

27,886

- Other financial corporations

15,032

7,938

4,774

4,473

4,907

4,670

Non-financial corporations

5,100

5,516

6,866

5,622

6,572

12,521

Private sector

174,264

206,568

260,250

277,335

346,468

411,368

- Financial corporations

115,780

145,415

187,507

204,012

262,543

315,944

- Non-financial corporations

58,484

61,153

72,742

73,324

83,925

95,425

Net foreign debt

193,872

208,628

227,782

225,577

272,071

310,952

Public sector

70,169

65,231

45,392

33,889

17,022

8,490

General government

37,413

39,713

30,368

22,995

13,652

13,762

Financial corporations

28,328

21,360

9,196

6,107

-2,810

-15,205

- Reserve Bank

-18,394

-22,092

-23,950

-22,843

-27,150

-36,909

- Central Borrowing Authorities

41,378

40,195

36,391

32,387

27,970

26,248

- Other financial corporations

5,344

3,257

-3,245

-3,437

-3,630

-4,543

Non-financial corporations

4,428

4,157

5,828

4,787

6,179

9,932

Private sector

123,703

143,398

182,390

191,688

255,049

302,462

- Financial corporations

79,630

99,796

128,746

140,567

194,702

235,728

- Non-financial corporations

44,072

43,602

53,644

51,121

60,347

66,735

(a) Foreign debt levels between direct investors and direct investment enterprises are recorded on a gross basis for assets and liabilities.

Source: Balance of Payments and International Investment Position, Australia (5302.0).